Home Improvement Return on Investment

Most would agree making improvements to your home increases its value.  Too often, making energy efficient upgrades is overlooked as a way to increase the value of your home.  Sure, adding insulation in the attic isn’t immediately satisfying, such as installing granite counter-tops, but if the money you save by installing attic insulation pays for those counter-tops, well that is much more satisfying.  Making your home more energy efficient not only saves you money, it also increases the market value of your home.  According to the Appraisal Institute (, an energy efficient home can be valued $20 higher for every $1 in annual energy savings.  This means if your Green remodeled home uses $1,000 less energy per year than a comparable home in the area, the value of your home would increase by $20,000.

According to the book “Green Remodeling by Barry Katz”, there were two recent studies that conclude the following…..  Recent sales data from the Regional Multiple Listing Service (RMLS) in Portland, Oregon showed that certified Green homes (received a 3rd party Green certification), sold for an average of $223 per square foot, and comparable standard homes sold for an average of $196 per square foot.  The Green home sold for 13.8% higher.  They also sold faster with being on the market ⅓ fewer days.

A similar study was conducted in Seattle which again showed the value of energy efficient home improvements (and the resulting ROI for the seller).  New homes built in 2007 that had 3rd party Green certifications, sold 18% quicker.  Also, the average size of the Green home was 25% smaller, but yet sold for 4% more.  This means looking at if from a dollar per square foot point of view, they sold for 37% more.  Green certified condos in Seattle sold for 28% more per square foot.

According to Rick Fedrizzi, President of the USGBC, “Green building can stimulate the economy at a level one and a half times larger than the federal stimulus bill.  In terms of climate change, a commitment to energy efficiency would be the equivalent to talking more than 200 million vehicles off the road.”  McKinsey & Company released a report in 2009, which stated that investing in the energy efficiency of buildings and other non-transportation sectors could reduce the nation’s energy consumption by 23% by the year 2020, save the U.S. economy $1.2 trillion, and reduce the greenhouse gas emissions by 1.1 gigatons annually.